Ascend Issues Upbeat forecast Amid Takeover Rumors
NEW YORK -(Dow Jones, Dec 5)- Shares of
computer-networking products maker Ascend
Communications Inc. jumped again Friday after
the firm said it would meet Wall Street's
fourth-quarter earnings estimates and speculation
made the rounds that Lucent Technologies Inc.
might be considering a takeover offer.
In Friday morning trading, shares of Alameda,
Calif.-based Ascend (ASND) were up $4, or 15%,
at $30.875 in heavy volume. On Thursday,
Ascend stock advanced 14%.
Some analysts said the rumor concerning Lucent
was wild speculation because Lucent recently
agreed to acquire networking concern Livingston
Enterprises Inc., which, like Ascend, also
specializes in "remote-access" products. Still, a
report on CNBC late Thursday quoted
unidentified sources as saying Lucent might have
already made an offer for Ascend.
Ascend Chief Executive Officer Mory Ejabat
Thursday said the company expects to meet
fourth-quarter estimates. The mean estimate of
analysts surveyed by First Call is for net income
of around 23 cents per share. Ejabat also said the
company is comfortable with Wall Street estimates
of $1.05 a share for 1997 and $1.15 for 1998.
Ascend's outlook was welcome news for investors
after two big networking players, 3Com Corp. and
Cabletron Systems Inc., earlier this week warned
that they would miss estimates for their November
quarters. Ascend itself issued a warning last
quarter due to problems with its MAX TNT
remote-access product, which Internet service
providers use to link users to various networks.
Weakness in the Japanese market and pricing
pressure from networking-market leader Cisco
Systems Inc. and 3Com in the remote-access
market also hurt Ascend.
Ascend in June acquired fellow networker
Cascade Communications Corp. a $3 billion
marriage aimed at becoming more of a one-stop
shop to better compete with Cisco. Ascend is
trying to protect its lead in remote-access servers,
which allow users outside an office to call in and
connect to networks or the Internet. Cascade
specializes in advanced switching technologies
known as asynchronous transfer mode, or ATM,
and frame relay.
Lucent, the big telecommunications-equipment
maker spun off from AT&T Corp. last year, in
October said it agreed to acquire privately held
Livingston for $650 million worth of stock. Lucent
has said it plans to make networking one of its
"fastest growing segments." Fore Systems Inc. and
other firms have also been mentioned in recent
months as possible targets. |
